A Boston-area savings bank is reaching into nearby New Hampshire for its second acquisition this year.
Andover Bancorp of Andover, Mass., said it will buy Finest Financial Corp. of Pelham, N.H., in a stock deal currently worth nearly $20 million.
The final value will depend on the stock price at the time the deal is completed, which is expected to be by the first quarter of next year.
"It's really just a natural market extension of our present franchise," said Andover president and chief executive Gerald T. Mulligan. "We always look for growth opportunities where possible if they are logical extensions of our geographical focus."
The deal, which will add $182.7 million of assets to Andover's $995 million, is the second for the company this year. On April 1, Andover bought Community Savings Bank of Lawrence, Mass., with $110.5 million of assets and four branches. Mr. Mulligan said the bank will continue looking for other deals in New Hampshire and Massachusetts.
Andover joins a group of midsized New England banks that have looked for similar markets across state lines as the wave of consolidation continues to roll over the region.
In this new deal, Andover will exchange 1.1 million shares of common for 145,855 shares of Finest stock. The price is about 1.3 times the book value of Finest.
Finest is the holding company for the state-chartered Pelham Bank and Trust Co., which operates branches in three municipalities.
Andover officials expect to start earning money from the deal next year, but will write off a one-time charge of $2.6 million after taxes and use of a deferred tax credit. The charges include $4.35 million to cover the disposition of Finest's bad assets.
Nonperforming assets at Finest totaled $14 million at the end of the second quarter, about 8% of all assets. Andover has $27 million in bad assets, about 3% of its total.
Andover, with 10 branches in five communities north of Boston, reported second-quarter earnings of $2.5 million, with a return on average assets of 1.02%.
